How automotive unicorn CARS24 is translating big ticket transactions online

According to Vikram Chopra, CEO & Founder, Cars24, India has just two cars per 100 people, and the reason, he says, is affordability. And that is what CARS24 has been trying to solve since 2015 by enabling people to sell and buy pre-owned cars online.

CARS24 is an ecommerce platform for pre-owned vehicles that aims to transform the way consumers buy and sell cars by leveraging technology at every leg of the consumer journey to solve genuine pain points and deliver a seamless experience. 

Doing so, CARS24 became the first Indian startup in the automotive sector to reach the unicorn status with its Series E funding last year. This year, it raised more with Series F at a valuation of $1.84 billion. The company said it has been able to capture about 90 percent market share in the online used car segment, and has clocked more than 13 million monthly traffic and over four lakh transactions until now. 

Speaking about the secret sauce of cracking such big ticket transactions online, Vikram shared that it is CARS24’s constant work towards building trust and fulfilling the dreams of many Indians to own a car by transforming the customer's journey with hassle-free, safe, and transparent process.

Speaking at the 12th edition of YourStory’s flagship event TechSparks 2021, India’s largest and most influential tech-entrepreneurship conference, Vikram shared that “the adoption of people buying cars online is going to be really fast simply because it’s a very long tail category. We are constantly building our infrastructure and logistics to help reach buyers in different cities.” 

Since its inception, CARS24 has built a strong technology backbone that features various first-of-its-kind offerings, including an innovative auction format, a state-of-the-art proprietary inspection app, and a powerful algorithm that matches supply and demand across the country. 

In addition, CARS24 also features an innovative price discovery mechanism for used vehicles. It claims to be the first player in the pre-owned vehicle industry to procure a non-banking financial company (NBFC) licence and launch consumer lending business with CARS24 Financial Services and two-wheeler segment BIKES24. 

It is backed by marquee investors like Sequoia India, Exor Seeds (venture arm of Exor, one of the world’s leading holding companies controlled by the Agnelli Family), DST Global, Kingsway Capital (London based multi-billion US$ fund), Unbound (global investment firm headquartered in London), Moore Strategic Ventures and KCK (Silicon Valley & New York based investment firm).

How Covid-19 accelerated growth

The company’s growth even more accelerated in the last 15-18 months, and it saw a significant jump in its online traffic, which is translating into a lot of transactions happening online after the pandemic because Covid-19 outbreak made people try new things, especially buying online, including cars.

Vikram says a lot of people chose safety and gave it a shot. He says, after experiencing the online prices at CARS24, customer in their feedback said that they regret not trying it earlier.

The case study

CARS24’s success has come on the back of a 360 degree approach of enabling online platforms as well as creating touchpoints, building trust, ensuring higher quality to its users, and solving their key pain points using technology.

Vikram says that very few people are still buying or selling their cars online, and CARS24 is trying to educate people that this is a much superior way of transacting a vehicle.

“We are where horizontal ecommerce was 10 years ago. Today, we quickly buy mobile phones or t-shirts online, but it was not there 6-10 years ago. So we are at the beginning of getting people to buy or sell cars online, and in ten years it will be the way to go.

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Vikram says some of the key pain points that CARS24 has focussed on is helping consumers to select a car, which has been difficult in the offline world. After selecting cars, consumers can find out how much loan they can get, they have 360 degree images of the cars, and if they order the car, the car literally shows up at their doorstep, and even returns in a week, if they don't like it. 

“In all of this, trust has been a focal point,” adds Vikram. 

“The fact that we deliver the same experience to the consumer as ecommerce platforms, including refunds, has translated into people making big ticket transactions to buy a car online,” he adds.

The company has over the years have stood out for its enormous category. Vikram points out that the company has 10,000+ unique cars for consumers to choose from, which is huge as compared to offline dealerships where it is not physically possible to have an assortment of 10,000 cars. 

From India to the world

Not only in India, CARS24 wants to make buying and selling cars online an universal phenomenon. Hence, it has expanded its services to Australia, the UAE ,Middle East, and is now expanding to Thailand, and some parts of Southeast Asia. 

“Our ambition is to launch the CARS24 platform in new geographies and then replicate the same in the two wheeler segment as well, which we have started with bikes,” he adds.

Road map

Vikram points out that the used car market is still unorganised and fragmented. He says that if someone is looking to buy and sell a used car, they are essentially dealing with a fragmented setup like informal dealerships. And that's what CARS24 aims to change using the internet by taking the whole transaction process online.

The startup wants to disrupt the used car market, which has been bigger than the new cars market in India. “The core business of buying and selling cars online in India itself is an incredibly large opportunity. It is a $50 billion market today across cars and bikes, but in five to 10 years, this would be like a $100 billion to $200 billion market, so it's one of the largest market categories to go after. Today we have only 5 percent share in a category that's growing really fast. So I think there is lots to be done.”

Speaking on the theme of TechSparks 2021 of ‘What’s next, or what’s the future’, Vikram concluded by saying that the adoption of people buying cars online is going to be really fast. 

“It may take some time, but eventually cars will be 100 percent sold online,” he added. CARS24 is building warehouses in every major city in India, building in-house servicing centers across the country, strengthening its logistics, and building an overall infrastructure, including financing to help people buy high ticket items like cars.

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